Role of non-profit enterprises in the economy has drawn increasing attention in recent years, both due to the substantial degree of public subsidization they receive (primarily via tax exemptions) and because of rising concerns about competition between proprietary and non-profit firms. The industries in which non-profits are most prevalent are heavily concentrated in the health care sector. It is commonly thought that non-profits play a significant role in these industries because they have less incentive to underprovide quality when some consumers are not well informed about important dimensions of the service. The theory developed here explores the linkages between information, quality of care, and price, as well as the role of the non-profit sector in overcoming the underprovision of quality by the market both directly (by providing services) and indirectly (by influencing the equilibrium quality level in the proprietary sector). This theory then serves as the basis for consistent empirical hypotheses concerning the quality of care and the effect of the existence and prevalence of non-profit enterprise on the overall market equilibrium. Previous empirical work on the effects of non-profit enterprise on the quality of care have treated ownership status as exogenous. Clearly, the non-profit market share is endogenously determined. Nursing home data will be used to correct for this simultaneity bias using a two step econometric procedure similar to that employed in the self-selectivity literature. In the first step, non-profit market share is predicted. The second step involves the estimation of a system of equations explaining observed performance (e.g. price and quality) conditional on the predicted market share of the non-profit sector. In addition, tests of the information-quality-price linkages are proposed. This work seeks to make a significant contribution to both the theoretical and empirical understanding of the quality of care and the effects of ownership structure in the nursing hone industry.